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☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware						38-4101973
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

125 S. Wacker Drive, Suite 1250 Chicago, Illinois						60606
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number: (312) 840-6000

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common stock, par value $0.0001 per share

FREE

The NASDAQ Stock Market LLC

Warrants to purchase one-half of one share of common stock

FREEW

The NASDAQ Stock Market LLC

Yes ☐ No ☒

Yes ☐ No ☒

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Large accelerated filer ☐			Accelerated filer ☒
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrects are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

						Page
PART I
Item 1.			Business			1
Item 1A.			Risk Factors			8
Item 1B.			Unresolved Staff Comments			22
Item 2.			Properties			22
Item 3.			Legal Proceedings			22
Item 4.			Mine Safety Disclosures			22
PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			23
Item 6.			Reserved			24
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			25
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk			39
Item 8.			Financial Statements and Supplementary Data			41
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			82
Item 9A.			Controls and Procedures			82
Item 9B.			Other Information			82
Item 9C.			Disclosure Regarding Foreign Jurisdictions That Prevent Inspections			82
PART III
Item 10.			Directors, Executive Officers and Corporate Governance			83
Item 11.			Executive Compensation			83
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			83
Item 13.			Certain Relationships and Related Transactions, and Director Independence			83
Item 14.			Principal Accounting Fees and Services			83
Part IV
Item 15.			Exhibits, Financial Statement Schedules			84
Item 16.			Form 10-K Summary			86
			Signatures			87

We have continued to pursue our growth strategy, and on November 10, 2020, we executed and closed a definitive Equity Purchase Agreement (the “Swerve Purchase Agreement”) with RF Development, LLC (“RF Development”), Swerve, L.L.C. (“Swerve LLC”), and Swerve IP, L.L.C. (“Swerve IP” and together with Swerve LLC, “Swerve”). Swerve is a manufacturer and marketer of a portfolio of zero and reduced sugar, keto-friendly, and plant-based sweeteners and grain free, gluten free, and low/no sugar baking mixes. We purchased all of the issued and outstanding equity interests of both Swerve LLC and Swerve IP from RF Development, and both Swerve LLC and Swerve IP became wholly-owned subsidiaries of Whole Earth Brands. The transaction was structured to simultaneously sign and close, was not subject to any closing conditions, and closed on November 10, 2020.

On December 17, 2020, we entered into a stock purchase agreement (the “Wholesome Purchase Agreement”) with WSO Investments, Inc. (“WSO Investments” and together with its subsidiaries, “Wholesome”), WSO Holdings, LP (“WSO Partnership”), Edwards Billington and Son, Limited (“EBS”), WSO Holdings, LLC (“WSO LLC,” and together with WSO Partnership and EBS, the “WSO Sellers”), and WSO Partnership, in its capacity as representative for the WSO Sellers. WSO Investments is the direct parent of its wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to import, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products. The transaction closed on February 5, 2021.

			2022						2021						2020
Branded CPG			79		%				79		%				64		%
Flavors & Ingredients			21		%				21		%				36		%

Pure Via®: Pure Via® is a global brand of plant-based, low-calorie sweeteners that is primarily marketed in Western Europe and North America. Pure Via®-branded products are sold through a variety of channels including grocery, drugstores, mass, club, food-service, and e-commerce. Key Pure Via® sweetener formulations include stevia leaf extract, erythritol and xylitol.

Recent product launches across various geographical markets have been well-received by consumers, and we believe that sales of new products will continue to have a positive impact on revenue going forward. We are able to adapt to changing market conditions, and our management team has identified opportunities for continued research and development, and expansion of product offerings as consumer preferences shift towards natural products.

Access to all of our SEC filings, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, is provided, free of charge, on our website (www.wholeearthbrands.com) as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Additionally, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

•tampering by unauthorized third parties;

•product contamination;

•the presence of foreign objects, substances, chemicals and other agents; or

•residues introduced during the manufacturing, packaging, storage, handling or transportation phases.

We are unable to predict whether there will be additional price or tax increases for tobacco products or the size of any such increases, or the effect of other developments in tobacco regulation or litigation or consumer attitudes on further declines in the consumption of either tobacco products containing licorice extract or on sales of licorice extract to the tobacco industry. Further material declines in sales to the tobacco industry are likely to have a significant negative effect on the financial performance of our Flavors & Ingredients business.

We operate a complex supply chain which is critical to our Flavors & Ingredients operations. In the event of disruption, we may face operational risk that could result in carrying inadequate supplies to meet our customer demand. If we are unable to manage our supply chain efficiently, our operating costs could increase and our profit margins could decrease.

Industry competition, consolidation and costs may reduce sales and margins.

Our Flavors & Ingredients customers are under pressure to reduce costs, which could cause them to reformulate their products and substitute cheaper ingredients for our products. The ingredients industry is also undergoing consolidation. Consolidation may enable our customers to negotiate lower prices for our Flavors & Ingredients products. These customer and industry pressures may result in lower sales of our Flavors & Ingredients products and/or lower margins on our Flavors & Ingredients sales.

Our margins are also under pressure from consolidation in the retail food industry in many regions of the world. In the United States, we have experienced a shift in the channels where consumers purchase our products from the higher margin retail to the lower margin club and mass merchandisers. Additionally, increased competition from private label manufacturers of low-calorie tabletop sweeteners may have a negative impact on sales and/or margins. Consolidation within the industry we operate may significantly increase our cost of doing business and may further result in lower sales of our products and/or lower margins on sales.

Governmental authorities, non-governmental organizations, customers, investors, external stakeholders and employees are increasingly sensitive to sustainability and ESG concerns, such as diversity and inclusion, climate change, water use, recyclability or recoverability of packaging, and plastic waste. In addition, governments and the public expect companies like us to take responsibility for and report on compliance with various human rights, responsible sourcing and environmental practices, as well as other actions of our third-party contractors around the world. This focus on ESG concerns and changing regulation, such as the CSRD, may lead to new requirements that could result in increased costs associated with developing, manufacturing and distributing our products and increased costs associated with compliance and reporting. Moreover, the standards by which ESG matters are measured are developing and evolving, and certain areas are subject to assumptions that could change over time. A variety of organizations measure performance on ESG topics, including on topics such as the cost, even if unintended, of our actions on climate change and inequality in society. Our ability to compete could also be affected by changing customer preferences and requirements, such as growing demand for more environmentally friendly products, packaging or supplier practices, and by failure to meet such customer expectations or demand. While we strive to improve our ESG performance, we risk negative stockholder reaction, including from proxy advisory services, as well as damage to our brand and reputation, if we do not act responsibly, or if we are perceived to not be acting responsibly in key ESG areas, including environmental stewardship, product safety and quality, sustainable sourcing and packaging, support for local communities, diversity and inclusion, corporate governance and transparency, and addressing workers’ rights, or if our business changes in a manner that requires us to change our sustainability and ESG goals. Additionally, failure to achieve our publicly-disclosed sustainability and ESG goals or targets, or to meet the ESG expectations of our investors, employees, customers, ESG ratings agencies and other stakeholders, could negatively impact our reputation, hinder our access to capital, lead to reduced demand for our products, loss of customers, “greenwashing” and other claims, and other negative impacts on our business and results of operations.

Our business could in the future be, negatively impacted by decreases in disposable income, and declines in consumer confidence could cause a decrease in demand for our overall product set, particularly higher priced products; reduced workforce due to illness or restrictions related to communicable disease; the development and availability of effective treatments and vaccines for new variants; a shortage of qualified labor to support increased demand; any failure to make our products available to consumers by our manufacturing employees or third parties on which we rely, including but not limited to our suppliers, contract manufacturers, distributors, logistics providers and other business partners, and retailers that ultimately sell our Branded CPG products to consumers and customers of our Flavors & Ingredients business. The impact of, and associated responses to, the COVID-19 pandemic may have an adverse effect on other aspects of our business and operations. For example, we may incur increased costs or face operational challenges, including: increased manufacturing costs or decreased manufacturing capacity; increases in the costs, or reductions in the availability of timely delivery of, ingredients, packaging and other materials used in the manufacture of our products; increased labor costs; and other increased operating costs.

A portion of our Flavors & Ingredients revenues are derived from the sale of licorice to worldwide confectioners. To the extent that consumer preferences shift away from licorice-flavored candy, operating results relating to the sale of licorice to worldwide confectioners could be impaired, which could have a material adverse effect on our business, financial condition and results of operations. In addition, a portion of our revenues are derived from the sale of licorice derivatives to food processors for use as flavoring or masking agents. To the extent that consumer preferences evolve away from products that use licorice derivatives, operating results relating to the sale of licorice derivatives could be impaired, which could have a material adverse effect on our business, financial condition and results of operations.

We have operations in the U.K. related to our Branded CPG segment. Brexit has created and may continue to create legal, political and economic risks and uncertainties for these U.K. operations.

Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate. To the extent we expand our international activities, our exposure to unauthorized copying and use of our technologies and proprietary information may increase. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our technology and intellectual property.

We may become involved in litigation that may materially adversely affect us.

Our substantial indebtedness could adversely affect our financial condition and we may incur additional debt.

•require us to dedicate a substantial portion of cash flow from operations to payments in respect of our indebtedness, instead of funding working capital, capital expenditures, potential acquisition opportunities, a level of marketing necessary to maintain the current level of sales and other general corporate purposes;

•increase the amount of interest that we have to pay, because our borrowings are at variable rates of interest, which will result in higher interest payments if interest rates increase, and, if and when we are required to refinance any of our indebtedness, an increase in interest rates would also result in higher interest costs;

•increase our vulnerability to adverse general economic or industry conditions;

•require refinancing, which we may not be able to do on reasonable terms;

•limit our flexibility in planning for, or reacting to, competition and/or changes in our business or the industry in which we operate;

•limit our ability to borrow additional funds;

•restrict us from making strategic acquisitions or necessary divestitures, introducing new brands and/or products or exploiting business opportunities; and

•place us at a competitive disadvantage compared to our competitors that have less debt and/or more financial resources.

Our ability to meet expenses and debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, potential changes in consumer and customer preferences and behaviors, the success of product and marketing innovation and pressure competitors. If we do not generate enough cash to pay our debt service obligations, we may be required to refinance all or part of our existing debt, sell assets, reduce or delay capital expenditures, borrow more money or issue additional equity.

•changes in the industries in which we and our customers operate, including developments involving our competitors;

•variations in our operating performance and the performance of our competitors in general;

•actual or anticipated fluctuations in our quarterly or annual operating results;

•publication of research reports by securities analysts about us or our competitors or our industry;

•the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

•additions and departures of key personnel;

•changes in laws and regulations affecting our business;

•commencement of, or involvement in, litigation involving the combined company;

•changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

•the volume of shares of our common stock available for public sale; and

•general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism.

In the past, securities class-action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type of litigation could result in substantial costs and divert our management’s attention and resources, which could have a material adverse effect on us.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports. In the future, we may discover areas of our internal control over financial reporting that need improvement. If we fail to properly and efficiently maintain an effective internal control over financial reporting, we could fail to report our financial results accurately. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.

As a result of the Business Combination, we inherited the historic liabilities of Merisant and MAFCO, including their historic tax liabilities. To the extent that there is any liability for historic tax exposure of any of the companies acquired through the Business Combination, this exposure can impact the value of our securities. Such exposure could also impact our tax liability for future years. As a part of the Business Combination, we have negotiated certain indemnities for historic tax liabilities, however, these indemnities do not cover all potential historical tax liabilities.

We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions or relief. However, we do not consider any such claims, lawsuits or proceedings that are currently pending, individually or in the aggregate, to be material to our business or likely to result in a material adverse effect on our future operating results, financial condition or cash flows.

Item 5.    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

The following stock performance graph compares the cumulative total return of our common stock since it began trading on the NASDAQ on June 25, 2020 through December 31, 2022 with the cumulative total return of the S&P 500 Index and the S&P 1500 Packaged Foods & Meats Index. The graph assumes the value of the investment in our common stock and each index was $100 on June 25, 2020 and assumes reinvestment of any dividends. The stock price performance below is not necessarily indicative of future stock price performance.

Company Name / Index						June 25, 2020						December 31, 2020						December 31, 2021						December 31, 2022
Whole Earth Brands, Inc.						$	100.00					$	107.92					$	106.34					$	40.30
S&P 500						$	100.00					$	122.84					$	158.11					$	129.47
S&P Composite 1500 Packaged Foods & Meats Index						$	100.00					$	110.00					$	124.34					$	134.50

•Branded CPG, comprised of our Merisant division of operating companies, Wholesome and Swerve, is a global CPG business focused on building a branded portfolio oriented toward serving consumers seeking better-for-you sweeteners across the zero calorie, plant-based, organic, non GMO, and Fair Trade spaces in zero/low calorie sweeteners, honey, agave baking mix, and baking chocolate segments. Our Branded CPG products are sold under both our flagship brands, as well as local and private label brands. Our flagship brands include Whole Earth®, Pure Via®, Wholesome®, Swerve®, Canderel®, Equal® and existing branded adjacencies.

•Flavors & Ingredients, comprised of our Mafco Worldwide division of operating companies, is a global, business-to-business focused operation with a long history as a trusted supplier of essential, functional ingredients to some of the CPG industry’s largest and most demanding customers. Our products provide a variety of solutions for our customers, including flavoring enhancement, flavor / aftertaste masking, moisturizing, product mouthfeel modification and skin soothing characteristics. Our Flavors & Ingredients segment operates as our licorice-derived products business.

To finance a portion of the Swerve transaction, we utilized approximately $47.9 million under our $50 million revolving loan facility with Toronto Dominion (Texas) LLC.

During 2022, we have continued to experience inflationary cost increases in raw materials and transportation costs, as well as supply chain challenges. We expect these cost pressures and supply chain challenges to continue in 2023. These cost increases have resulted in and could continue to result in negative impacts to our results of operations. However, we have taken measures to mitigate the impact of these inflationary pressures by implementing pricing actions.

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Product revenues, net			$	538,272					$	493,973					$	147,168								$	128,328
Cost of goods sold			398,060						335,218						101,585									77,627
Gross profit			140,212						158,755						45,583									50,701
Selling, general and administrative expenses			99,735						113,141						44,616									43,355
Amortization of intangible assets			18,623						18,295						6,021									4,927
Asset impairment charges			46,500						—						—									40,600
Restructuring and other expenses			—						4,503						1,052									—
Operating (loss) income			(24,646)						22,816						(6,106)									(38,181)
Change in fair value of warrant liabilities			1,232						29						—									—
Interest expense, net			(30,600)						(24,589)						(4,371)									(238)
Loss on extinguishment and debt transaction costs			—						(5,513)						—									—
Other income (expense), net			1,051						196						(578)									801
Loss before income taxes			(52,963)						(7,061)						(11,055)									(37,618)
Provision (benefit) for income taxes			5,789						(7,144)						(2,618)									(3,482)
Net (loss) income			$	(58,752)					$	83					$	(8,437)								$	(34,136)

Product revenues, net. Product revenues, net for the year ended December 31, 2022 were $538.3 million, an increase of $44.3 million, or 9.0%, from $494.0 million for the year ended December 31, 2021 due to a $33.5 million increase in product revenues at Branded CPG and a $10.8 million increase in product revenues at Flavors & Ingredients. The increase in Branded CPG revenues was primarily a result of a full year of Wholesome (acquired February 5, 2021), as well as price increases, partially offset by declines in volume and unfavorable impacts from foreign exchange, as further discussed below. The increase in Flavors & Ingredients revenues was primarily driven by volume growth and price increases, partially offset by unfavorable impacts from foreign exchange, as further discussed below.

Cost of goods sold. Cost of goods sold for the year ended December 31, 2022 was $398.1 million, an increase of $62.8 million, or 18.7%, from $335.2 million for the year ended December 31, 2021. The increase was primarily due to a $36.3 million increase in costs as a result of a full year of Wholesome (acquired February 5, 2021), as well as costs associated with the new production operations at Branded CPG and increased logistics, energy and raw materials costs due to inflationary pressures, partially offset by a $1.0 million decline in stock-based compensation expense.

Selling, general and administrative expenses. Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2022 were $99.7 million, a decrease of $13.4 million, or 11.8%, from $113.1 million for the year ended December 31, 2021. The decrease was primarily due to a $13.5 million decline in public company readiness and acquisition related transaction expenses, a $5.3 million decrease in marketing costs, and a $2.2 million decrease in stock-based compensation expense, partially offset by $1.4 million of severance and related expenses, a $2.1 million increase in bonus expense, higher salaries from increased headcount in the second half of 2021 and increases in other corporate expenses including higher professional fees and insurance expense.

Amortization of intangible assets. Amortization of intangible assets for the year ended December 31, 2022 was $18.6 million, an increase of $0.3 million, or 1.8%, from $18.3 million for the year ended December 31, 2021 primarily due to amortization expense related to the intangible assets acquired as part of the Wholesome acquisition on February 5, 2021.

Asset impairment charges. Asset impairment charges were $46.5 million for the year ended December 31, 2022. The Company determined that the carrying values of the North America and LATAM reporting units within Branded CPG exceeded their respective fair values and as a result, the Company recognized non-cash goodwill impairment charges of $42.5 million related to the North America reporting unit and $4.0 million related to the LATAM reporting unit.

Restructuring and other expenses. Restructuring and other expenses were $4.5 million for the year ended December 31, 2021 and related primarily to certain disposal costs at our Camden, New Jersey facility, which was sold in the second quarter of 2021.

Change in fair value of warrant liabilities. Change in fair value of warrant liabilities for the year ended December 31, 2022 was a non-operating gain of $1.2 million, compared to a non-operating gain of $0.03 million for the year ended December 31, 2021, which is net of a $1.2 million non-operating gain that relates to the fiscal year ended December 31, 2020. See Notes 1, 8 and 9 to our audited consolidated and combined financial statements for further discussion.

Interest expense, net. Interest expense, net for the year ended December 31, 2022 was $30.6 million, an increase of $6.0 million, or 24.4%, from $24.6 million for the year ended December 31, 2021. The increase was primarily due to higher debt levels under our revolving credit facility and rising interest rates during the year ended December 31, 2022 compared to the year ended December 31, 2021.

Other income (expense), net. Other income (expense), net for the year ended December 31, 2022 was income of $1.1 million, an increase of $0.9 million from income of $0.2 million for the year ended December 31, 2021. The increase was primarily due to a $1.1 million non-cash gain related to the settlement of the Wholesome acquisition earn-out as further described above.

Provision (benefit) for income taxes. The provision for income taxes for the year ended December 31, 2022 was $5.8 million which relates primarily to current and deferred foreign taxes in connection with our operations in China, France and Switzerland partially offset by a deferred tax benefit in the U.S. The tax benefit on our U.S. operating loss was limited as it included an impairment of non-deductible goodwill and interest deductions within the U.S for which no tax benefit was provided. The benefit for income taxes for the year ended December 31, 2021 was $7.1 million.

Product revenues, net. Product revenues, net were $494.0 million for the year ended December 31, 2021. Product revenues, net for the combined year ended December 31, 2020 were $275.5 million, including $147.2 million for the period from June 26, 2020 through December 31, 2020 and $128.3 million from January 1, 2020 through June 25, 2020. Product revenues, net increased $218.5 million, or 79.3%, due to a $211.6 million increase in product revenues at Branded CPG and a $6.9 million increase in product revenues at Flavors & Ingredients. The increase in Branded CPG revenues was driven by $203.6 million of revenues from the acquisitions of Wholesome and Swerve, $2.8 million of organic Branded CPG growth and a $5.2 million favorable impact from foreign exchange.

Cost of goods sold. Cost of goods sold was $335.2 million for the year ended December 31, 2021. Cost of goods sold for the combined year ended December 31, 2020 was $179.2 million, including $101.6 million for the period from June 26, 2020 through December 31, 2020 and $77.6 million from January 1, 2020 through June 25, 2020. Cost of goods sold increased $156.0 million, or 87.1%, primarily driven by $154.2 million from the acquisitions of Wholesome and Swerve (which includes $1.6 million of purchase accounting adjustments related to inventory), additional costs associated with new production operations of $7.9 million, increased sales volume and mix and a $1.0 million increase in stock-based compensation expense, partially offset by a $17.6 million favorable change in purchase accounting adjustments related to inventory revaluation adjustments from the Business Combination (benefit of $5.5 million for the year ended December 31, 2021 compared to expense of $12.1 million for the year ended December 31, 2020).

Selling, general and administrative expenses. SG&A expenses were $113.1 million for the year ended December 31, 2021. SG&A expenses for the combined year ended December 31, 2020 were $88.0 million, including $44.6 million for the period from June 26, 2020 through December 31, 2020 and $43.4 million from January 1, 2020 through June 25, 2020. SG&A expenses increased $25.2 million, or 28.6%, primarily due to a $3.3 million increase in acquisition related transaction expenses, $17.0 million of SG&A expenses from the acquisitions of Wholesome and Swerve, a $3.2 million increase in bonus expense (the prior year included a reversal of $2.3 million of bonus expense in the third quarter of 2020 for certain employees who received a one-time grant of restricted stock units in lieu of an annual cash bonus for 2020), a $5.6 million increase in stock-based compensation expense, a $2.6 million increase in insurance expense, and a $2.4 million increase in marketing costs, partially offset by transaction bonuses of $11.2 million recorded in 2020.

Amortization of intangible assets. Amortization of intangible assets was $18.3 million for the year ended December 31, 2021. Amortization of intangible assets for the combined year ended December 31, 2020 was $10.9 million, including $6.0 million for the period from June 26, 2020 through December 31, 2020 and $4.9 million from January 1, 2020 through June 25, 2020. Amortization of intangible assets increased $7.3 million, or 67.1%, primarily due to the amortization expense related to the intangible assets acquired as part of the Wholesome and Swerve acquisitions.

Asset impairment charges. There were no asset impairment charges for the year ended December 31, 2021. Asset impairment charges were $40.6 million in the Predecessor period and for the combined year ended December 31, 2020 and included an impairment charge of $22.9 million related to indefinite-lived intangible assets and a goodwill impairment charge of $17.7 million. The goodwill impairment charge of $17.7 million was the result of the Flavors & Ingredients and Branded CPG reporting units carrying value exceeding their fair value by $6.6 million and $11.1 million, respectively. The asset impairment charges were recorded in the first quarter of 2020.

Restructuring and other expenses. Restructuring and other expenses were $4.5 million for the year ended December 31, 2021 and related primarily to certain disposal costs at our Camden, New Jersey facility, which was sold in the second quarter of 2021. Restructuring and other expenses for the combined year ended December 31, 2020 were $1.1 million and related to employee termination benefits associated with restructuring plans to streamline processes, consolidate facilities and eliminate various positions in operations and general and administrative areas.

Change in fair value of warrant liabilities. Change in fair value of warrant liabilities for the year ended December 31, 2021 was a non-operating gain of $0.03 million, which is net of a $1.2 million non-operating gain that relates to the fiscal year ended December 31, 2020. See Notes 1, 8 and 9 to our audited consolidated and combined financial statements for further discussion.

Interest expense, net. Interest expense, net was $24.6 million for the year ended December 31, 2021. Interest expense, net for the combined year ended December 31, 2020 was $4.6 million, including $4.4 million for the period from June 26, 2020 through December 31, 2020 and $0.2 million from January 1, 2020 through June 25, 2020. Interest expense, net increased $20.0 million due to higher debt levels under our new credit facilities and the amortization of debt issuance costs.

Other income (expense), net. Other income (expense), net was income of $0.2 million for the year ended December 31, 2021. Other income (expense), net for the combined year ended December 31, 2020 was income of $0.2 million, including expense of $0.6 million for the period from June 26, 2020 through December 31, 2020 and income of $0.8 million from January 1, 2020 through June 25, 2020. Other income (expense), net was flat year over year.

Provision (benefit) for income taxes. The income tax benefit was $7.1 million for the year ended December 31, 2021. The income tax benefit for the combined year ended December 31, 2020 was $6.1 million, including $2.6 million for the period from June 26, 2020 through December 31, 2020 and $3.5 million for the period from January 1, 2020 through June 25, 2020.

			(Successor)																					(Predecessor)
(In thousands)			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Product revenues, net			$	422,638					$	389,174					$	96,857								$	80,749
Operating (loss) income			(30,182)						34,918						13,463									(5,055)

Segment product revenues, net. Product revenues, net for Branded CPG for the year ended December 31, 2022 were $422.6 million, an increase of $33.5 million, or 8.6%, from $389.2 million for the year ended December 31, 2021, primarily driven by a $40.1 million increase in revenues at Wholesome due to a full year of results in 2022 (acquired February 5, 2021) as well as both higher pricing and volume. This increase was partially offset by a $6.6 million decline in revenues for all other Branded CPG business as a $10.1 million increase in sales largely due to higher pricing was more than offset by a $6.2 million decline in sales due to the discontinuance of certain private label contracts and a $10.5 million unfavorable impact of foreign exchange.

Segment operating (loss) income. Operating loss for Branded CPG for the year ended December 31, 2022 was $30.2 million, a decrease of $65.1 million from operating income of $34.9 million for the year ended December 31, 2021, primarily due to the $46.5 million non-cash goodwill impairment charge, an increase in costs associated with new production operations of $14.9 million, increased logistics, energy and raw materials costs due to inflationary pressures, partially offset by a $6.4 million increase in operating income at Wholesome driven by a full year of results (acquired February 5, 2021), a $5.3 million decrease in marketing costs, and a $1.2 million reduction in stock-based compensation expense in the segment.

Segment product revenues, net. Product revenues, net for Branded CPG for the year ended December 31, 2021 were $389.2 million. Product revenues, net for Branded CPG for the combined year ended December 31, 2020 were $177.6 million, including $96.9 million for the period from June 26, 2020 through December 31, 2020 and $80.7 million from January 1, 2020 through June 25, 2020. Product revenues, net for Branded CPG increased $211.6 million primarily due to $203.6 million of revenues as a result of the acquisitions of Wholesome and Swerve, $2.8 million of global organic Branded CPG growth and a $5.2 million favorable impact of foreign exchange.

Segment operating income (loss). Operating income for Branded CPG for the year ended December 31, 2021 was $34.9 million. Operating income for Branded CPG for the combined year ended December 31, 2020 was $8.4 million, including operating income of $13.5 million for the period from June 26, 2020 through December 31, 2020 and an operating loss of $5.1 million from January 1, 2020 through June 25, 2020. Operating income for Branded CPG increased $26.5 million, primarily due to a goodwill impairment charge of $11.1 million and transaction bonuses of $2.7 million reflected in the prior year results that did not reoccur in 2021, additional operating income of $24.2 million related to the acquisitions of Wholesome and Swerve (which includes $1.6 million of amortization of inventory fair value adjustments), a reduction of $3.5 million in purchase accounting adjustments related to inventory revaluations from the Business Combination, as well as organic revenue growth, partially offset by costs associated with new production operations of $7.9 million, a $2.4 million increase in marketing costs, a $1.9 million increase in bonus expense (the prior year included a reversal of $1.2 million of bonus expense as described above) and a $2.5 million increase in stock-based compensation expense in 2021.

			(Successor)																					(Predecessor)
(In thousands)			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Product revenues, net			$	115,634					$	104,799					$	50,311								$	47,579
Operating income (loss)			32,505						21,860						(2,645)									(23,718)

Segment product revenues, net. Product revenues, net for Flavors & Ingredients for the year ended December 31, 2022 were $115.6 million, an increase of $10.8 million, or 10.3%, from $104.8 million for the year ended December 31, 2021, primarily driven by increases in licorice extracts and pure derivatives primarily due to volume and price growth, partially offset by a $2.2 million unfavorable impact of foreign exchange .

Segment operating income (loss). Operating income for Flavors & Ingredients for the year ended December 31, 2022 was $32.5 million, an increase of $10.6 million, or 48.7%, from $21.9 million for the year ended December 31, 2021, primarily driven by increased revenue of $10.8 million and a $4.5 million decrease in restructuring and other expenses included in the prior year results that did not re-occur in 2022, partially offset by a $4.6 million increase in cost of goods sold. The increase in cost of goods sold was largely due to the increase in revenue as well as a $2.9 million unfavorable change in amortization of purchase accounting adjustments related to inventory revaluations in the year ended December 31, 2022 (benefit of $2.5 million in the year ended December 31, 2022 compared to a benefit of $5.5 million in the year ended December 31, 2021).

Segment product revenues, net. Product revenues, net for Flavors & Ingredients for the year ended December 31, 2021 were $104.8 million. Product revenues, net for Flavors & Ingredients for the combined year ended December 31, 2020 were $97.9 million, including $50.3 million for the period from June 26, 2020 through December 31, 2020 and $47.6 million from January 1, 2020 through June 25, 2020. Product revenues, net for Flavors & Ingredients increased $6.9 million, or 7.1%, primarily driven by increases in licorice extracts and our Magnasweet® product lines.

Segment operating income (loss). Operating income for Flavors & Ingredients for the year ended December 31, 2021 was $21.9 million. Operating loss for Flavors & Ingredients for the combined year ended December 31, 2020 was $26.4 million, including $2.6 million for the period from June 26, 2020 through December 31, 2020 and $23.7 million from January 1, 2020 through June 25, 2020. Operating income for Flavors & Ingredients increased $48.2 million, primarily due to higher revenues, asset impairment charges totaling $29.5 million and transaction bonuses of $4.2 million, both included in the prior year results that did not re-occur in 2021, a favorable change in purchase accounting adjustments related to inventory of $14.1 million (benefit of $5.5 million in 2021 compared to expense of $8.6 million in 2020), a $1.5 million reduction in salaries as a result of position eliminations in 2020 and 2021, and lower operating expenses related to the Camden facility that was sold in the second quarter of 2021, partially offset by a $3.5 million increase in facility closure and restructuring costs, a $0.9 million increase in stock-based compensation expense and a $1.0 million increase in amortization expense due to purchase accounting revaluations of intangible assets.

			(Successor)																					(Predecessor)
(In thousands)			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Operating loss			$	(26,969)					$	(33,962)					$	(16,924)								$	(9,408)

Operating loss. Operating loss for Corporate for the year ended December 31, 2022 was $27.0 million, a decrease of $7.0 million or 20.6% from $34.0 million for the year ended December 31, 2021, primarily driven by an $11.7 million decrease in acquisition related transaction expenses and public company readiness expenses, partially offset by a $2.0 million increase in compensation expense (primarily due to increased headcount in the second half of 2021) and increases in other corporate expenses including professional fees and insurance expense.

Operating loss. Operating loss for Corporate for the year ended December 31, 2021 was $34.0 million. Operating loss for the combined year ended December 31, 2020 was $26.3 million, including $16.9 million for the period from June 26, 2020 through December 31, 2020 and $9.4 million from January 1, 2020 through June 25, 2020. Operating loss rose $7.6 million, or 29.0%, primarily due to a $3.3 million increase in acquisition related transaction expenses, a $3.1 million increase in stock-based compensation expense, a $2.6 million increase in insurance expense and higher salaries due to new hires and the full year impact of 2020 hires to operate as a public company, partially offset by $2.6 million of lower bonus expense as 2020 included $4.8 million of transaction bonuses.

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Net cash (used in) provided by operating activities			$	(5,810)					$	9,482					$	(9,445)								$	19,908
Net cash used in investing activities			(8,419)						(197,913)						(282,122)									(3,532)
Net cash provided by (used in) financing activities			16,525						199,330						252,216									(16,924)
Effect of exchange rates on cash and cash equivalents			(1,916)						499						714									215
Net change in cash and cash equivalents			$	380					$	11,398					$	(38,637)								$	(333)

Operating activities. Net cash used in operating activities was $5.8 million for the year ended December 31, 2022 compared to cash provided by operating activities of $9.5 million for the year ended December 31, 2021. The decrease in cash was primarily attributable to unfavorable working capital changes, higher income tax and interest payments and lower cash flows from operating results during the year ended December 31, 2022. Cash paid for interest for the year ended December 31, 2022 was $28.4 million compared to $21.2 million for the year ended December 31, 2021. Cash paid for income taxes, net of income tax refunds, was $9.1 million for the year ended December 31, 2022 compared to $4.5 million for the year ended December 31, 2021.

Investing activities. Net cash used in investing activities was $8.4 million for the year ended December 31, 2022 and included capital expenditures of $8.9 million and proceeds from the sale of fixed assets of $0.5 million.

Financing activities. Net cash provided by financing activities was $16.5 million for the year ended December 31, 2022 and reflects $54.0 million of proceeds from the revolving credit facility, repayments of the revolving credit facility of $3.0 million, repayments of long-term debt of $3.8 million, cash payment for the Wholesome acquisition earn-out of $29.1 million (amount is net of $0.9 million related to transaction bonuses paid in connection with the earn-out and reflected in operating activities), payments of $0.9 million for employee tax withholdings related to net share settlements of share awards and payments of debt issuance costs of $0.7 million.

At December 31, 2022, the Company’s senior secured loan agreement consisted of a senior secured term loan facility (the “Term Loan Facility”) of $375 million and a revolving credit facility of up to $125 million (the “Revolving Facility,” and together with the Term Loan Facility, the “Credit Facilities”). See Note 7 to our audited consolidated and combined financial statements for additional information on our Credit Facilities.

			Total						Current						Long-Term
Debt			$	444,438					$	3,750					$	440,688
Interest on debt (1)			191,532						40,801						150,731
Minimum lease obligations (2)			22,797						9,458						13,339
Raw materials purchase obligations			77,610						75,812						1,798
Other purchase obligations			4,944						3,120						1,824
Total			$	741,321					$	132,941					$	608,380

If we determine that it is more likely than not that a reporting unit is impaired or if we elect not to perform the optional qualitative assessment, a quantitative assessment is performed utilizing both the income and market approaches to estimate the fair value of its reporting units. The income approach involves discounting future estimated cash flows. The discount rate used is the value-weighted average of the reporting unit’s estimated cost of equity and debt (“cost of capital”) derived using both known and estimated customary market metrics adjusted for company specific risks. We perform sensitivity tests with respect to growth rates and discount rates used in the income approach. In applying the market approach, valuation multiples are derived from historical and projected operating data of selected guideline companies; evaluated and adjusted, if necessary, based on the strengths and weaknesses of the reporting unit relative to the selected guideline companies; and applied to the appropriate historical and/or projected operating data to arrive at an indication of fair value. We typically weight the results of the income and market approaches equally. If the reporting unit’s carrying value exceeds its estimated fair value, then an impairment is recorded for the difference, limited to the total amount of goodwill allocated to the reporting unit.

As disclosed in Note 6 to our audited consolidated and combined financial statements, as a result of our 2022 impairment test, the Company recorded non-cash goodwill impairment charges related to our North America and LATAM reporting units within the Branded CPG segment of $42.5 million and $4.0 million, respectively. The reporting units that were impaired were written down to their respective fair values resulting in zero excess fair value over carrying amounts as of the fourth quarter assessment date. Accordingly, our North America reporting unit has 10% or less excess fair value over carrying amount and a heightened risk of future impairments. The $4.0 million non-cash goodwill impairment charge related to our LATAM reporting unit was the full amount of goodwill associated with that reporting unit. The remaining reporting units have more than 10% excess fair value over carrying amounts as of the latest 2022 impairment test. The determination of estimated fair values requires significant judgments in estimating several factors, including, future cash flows, terminal growth rates, income tax considerations and discount rates. If current expectations of future cash flows are not met, if market factors outside of the Company’s control change, including those impacting discount rates, income tax rates and foreign currency exchange rates, or if management’s expectations or plans otherwise change, then one or more of our reporting units might become impaired in the future. After the impairments, the goodwill carrying amounts of the North America and LATAM reporting units was approximately $80.5 million and $0 million, respectively.

Reporting Unit						Goodwill Carrying Amount  (in thousands)						Discount Rate						Long-Term Growth Rate
North America						$	80,486					13.0%						2.5%

Assumptions used in impairment testing are made at a point in time and require significant judgment; therefore, they are subject to change based on the facts and circumstances present at each annual impairment test date. Additionally, these assumptions are generally interdependent and do not change in isolation. However, as it is reasonably possible that changes in assumptions could occur, as a sensitivity measure, we have presented the estimated effects of isolated changes in the discount rate and long-term growth rate on the fair values of our reporting unit with 10% or less excess fair value over carrying amount. These estimated changes in fair value are not necessarily representative of the actual impairment that would be recorded in the event of a fair value decline.

						Discount Rate												Long-Term Growth Rate
						50-Basis-Point												25-Basis-Point
Reporting Unit						Increase						Decrease						Increase						Decrease
North America						$	(7,513)					$	8,268					$	1,481					$	(1,413)

We typically evaluate impairment of indefinite-lived intangible assets, which relates to our product formulations, by first performing a qualitative assessment. If we elect to bypass the qualitative assessment or we determine that it is more likely than not that the fair value of the product formulations is less than its carrying value, a quantitative assessment is then performed using the relief from royalty method under the income approach to estimate the fair value. Some of the more significant assumptions inherent in estimating the fair value include the estimated future annual sales, royalty rates (as a percentage of sales that would hypothetically be charged by a licensor of the brand to an unrelated licensee), income tax considerations and a discount rate that reflects the level of risk.

See Note 6 to our audited consolidated and combined financial statements for additional information.

Income Taxes—The provision for income taxes is determined using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Pension Benefits—Retirement benefits are provided to certain current and former employees through qualified and non-qualified defined benefit pension plans sponsored by us. In 2022, the Company terminated its qualified defined benefit pension plan. The surplus assets of the terminated plan will be used, as prescribed in the applicable regulations, to fund future contributions to the defined contribution plan at Flavors and Ingredients. At December 31, 2022, the remaining surplus of the plan was approximately $2.5 million. Prior to the termination of the qualified defined benefit pension plan, it was our policy to fund the minimum for our company-sponsored pension plans as required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The expected cost of providing the qualified pension plan benefits was accrued over the years that the employees render services, until the plan was frozen on December 31, 2019. The expected cost of providing the non-qualified pension plan benefits is accrued over the years that the employees rendered services. It is our policy to fund non-qualified pension benefits as payments are due. Accounting for pension benefits requires the use of several assumptions and estimates. Actual experience or changes to these assumptions and other estimates could have a significant impact on our consolidated and combined results of operations and financial position. See Note 12 to our audited consolidated and combined financial statements for a summary of all of the key assumptions related to pension benefits as well as a description of our defined benefit pension plans as well as additional disclosures.

Foreign Currency Risk

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)			42
Consolidated Balance Sheets			43
Consolidated and Combined Statements of Operations			44
Consolidated and Combined Statements of Comprehensive Income (Loss)			45
Consolidated and Combined Statements of Equity			46
Consolidated and Combined Statements of Cash Flows			47
Notes to Consolidated and Combined Financial Statements
Note 1: Basis of Presentation and Significant Accounting Policies			49
Note 2: Business Combinations			56
Note 3: Leases			59
Note 4: Inventories			60
Note 5: Property, Plant and Equipment			61
Note 6: Goodwill and Other Intangible Assets			61
Note 7: Debt			63
Note 8: Warrants			65
Note 9: Fair Value Measurements			65
Note 10: Commitments and Contingencies			66
Note 11: Income Taxes			67
Note 12: Pension and Other Retirement Benefits			70
Note 13: Stock-Based Compensation			75
Note 14: Stockholders’ Equity			77
Note 15: Earnings Per Share			77
Note 16: Accumulated Other Comprehensive Income (Loss)			78
Note 17: Related Party Transactions			79
Note 18: Business Segments			79

Report of Independent Registered Public Accounting Firm

We have audited the accompanying consolidated balance sheets of Whole Earth Brands, Inc. and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated and combined statements of operations, comprehensive income (loss), equity and cash flows for the year ended December 31, 2022 (Successor), December 31, 2021 (Successor), and for the periods from June 26, 2020 through December 31, 2020 (Successor) and January 1, 2020 through June 25, 2020 (Predecessor), and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated and combined financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the year ended December 31, 2022 (Successor), December 31, 2021 (Successor), and for the periods from June 26, 2020 through December 31, 2020 (Successor) and January 1, 2020 through June 25, 2020 (Predecessor), in conformity with U.S. generally accepted accounting principles.

			December 31, 2022						December 31, 2021
Assets
Current Assets
Cash and cash equivalents			$	28,676					$	28,296
Accounts receivable (net of allowances of $1,614 and $1,285, respectively)			66,653						69,590
Inventories			218,975						212,930
Prepaid expenses and other current assets			10,530						7,585
Total current assets			324,834						318,401
Property, Plant and Equipment, net			58,092						58,503
Other Assets
Operating lease right-of-use assets			18,238						26,444
Goodwill			193,139						242,661
Other intangible assets, net			245,376						266,939
Deferred tax assets, net			539						1,993
Other assets			8,785						7,638
Total Assets			$	849,003					$	922,579
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable			$	47,002					$	55,182
Accrued expenses and other current liabilities			27,488						30,733
Contingent consideration payable			—						54,113
Current portion of operating lease liabilities			8,804						7,950
Current portion of long-term debt			3,750						3,750
Total current liabilities			87,044						151,728
Non-Current Liabilities
Long-term debt			432,172						383,484
Warrant liabilities			216						2,053
Deferred tax liabilities, net			32,585						35,090
Operating lease liabilities, less current portion			12,664						22,575
Other liabilities			9,771						13,778
Total Liabilities			574,452						608,708
Commitments and Contingencies (Note 10)			—						—
Stockholders’ Equity
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding			—						—
Common stock, $0.0001 par value; 220,000,000 shares authorized; 41,994,355 and 38,871,646 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively			4						4
Additional paid-in capital			360,777						330,616
Accumulated deficit			(85,188)						(26,436)
Accumulated other comprehensive (loss) income			(1,042)						9,687
Total stockholders’ equity			274,551						313,871
Total Liabilities and Stockholders’ Equity			$	849,003					$	922,579

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Product revenues, net			$	538,272					$	493,973					$	147,168								$	128,328
Cost of goods sold			398,060						335,218						101,585									77,627
Gross profit			140,212						158,755						45,583									50,701
Selling, general and administrative expenses			99,735						113,141						44,616									43,355
Amortization of intangible assets			18,623						18,295						6,021									4,927
Asset impairment charges			46,500						—						—									40,600
Restructuring and other expenses			—						4,503						1,052									—
Operating (loss) income			(24,646)						22,816						(6,106)									(38,181)
Change in fair value of warrant liabilities			1,232						29						—									—
Interest expense, net			(30,600)						(24,589)						(4,371)									(238)
Loss on extinguishment and debt transaction costs			—						(5,513)						—									—
Other income (expense), net			1,051						196						(578)									801
Loss before income taxes			(52,963)						(7,061)						(11,055)									(37,618)
Provision (benefit) for income taxes			5,789						(7,144)						(2,618)									(3,482)
Net (loss) income			$	(58,752)					$	83					$	(8,437)								$	(34,136)
Net (loss) earnings per share:
Basic			$	(1.42)					$	0.00					$	(0.22)
Diluted			$	(1.42)					$	0.00					$	(0.22)

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Net (loss) income			$	(58,752)					$	83					$	(8,437)								$	(34,136)
Other comprehensive income (loss), net of tax:
Net change in pension benefit obligations recognized, net of taxes of $640, $26, $242, and $65, respectively.			2,740						98						831									318
Foreign currency translation adjustments			(13,469)						984						7,774									(2,286)
Total other comprehensive (loss) income, net of tax			(10,729)						1,082						8,605									(1,968)
Comprehensive (loss) income			$	(69,481)					$	1,165					$	168								$	(36,104)

			(Predecessor)
			Total Equity
Balance at December 31, 2019			$	487,750
Funding to Parent, net			(11,924)
Net loss			(34,136)
Other comprehensive loss, net of tax			(1,968)
Balance at June 25, 2020			$	439,722

			Common Stock												Additional Paid-in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income						Total Stockholders’ Equity
			Shares						Amount
Balance at June 26, 2020 (Successor)			30,926,669						$	3					$	250,366					$	(16,703)					$	—					$	233,666
Issuance of warrants			—						—						7,895						—						—						7,895
Issuance of common stock			7,500,000						1						67,104						—						—						67,105
Net loss			—						—						—						(8,437)						—						(8,437)
Other comprehensive income, net of tax			—						—						—						—						8,605						8,605
Stock-based compensation			—						—						1,262						—						—						1,262
Other			—						—						(948)						(302)						—						(1,250)
Balance at December 31, 2020 (Successor)			38,426,669						4						325,679						(25,442)						8,605						308,846
Reclassification of Private Warrants			—						—						(7,062)						(1,077)						—						(8,139)
Transfer of Private Warrants to Public Warrants			—						—						6,057						—						—						6,057
Net income			—						—						—						83						—						83
Other comprehensive income, net of tax			—						—						—						—						1,082						1,082
Warrant exercises			100						—						1						—						—						1
Stock-based compensation			—						—						7,854						—						—						7,854
Net share settlements of stock-based awards			444,877						—						(1,913)						—						—						(1,913)
Balance at December 31, 2021 (Successor)			38,871,646						4						330,616						(26,436)						9,687						313,871
Transfer of Private Warrants to Public Warrants			—						—						605						—						—						605
Net loss			—						—						—						(58,752)						—						(58,752)
Other comprehensive loss, net of tax			—						—						—						—						(10,729)						(10,729)
Stock-based compensation			—						—						4,636						—						—						4,636
Net share settlements of stock-based awards			259,372						—						(418)						—						—						(418)
Net share settlements under management bonus plan			203,763						—						1,402						—						—						1,402
Shares issued for payment of contingent consideration			2,659,574						—						23,936						—						—						23,936
Balance at December 31, 2022 (Successor)			41,994,355						$	4					$	360,777					$	(85,188)					$	(1,042)					$	274,551

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Operating activities
Net (loss) income			$	(58,752)					$	83					$	(8,437)								$	(34,136)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Stock-based compensation			4,933						8,715						1,262									—
Depreciation			6,001						4,727						1,652									1,334
Amortization of intangible assets			18,623						18,295						6,021									4,927
Deferred income taxes			(456)						(12,300)						(2,842)									(5,578)
Asset impairment charges			46,500						—						—									40,600
Amortization of inventory fair value adjustments			(2,537)						(3,396)						12,613									—
Non-cash loss on extinguishment of debt			—						4,435						—									—
Amortization of debt issuance costs and original issue discount			1,982						1,783						762									—
Change in fair value of warrant liabilities			(1,232)						(29)						—									—
Changes in current assets and liabilities:
Accounts receivable			1,222						964						(4,554)									7,726
Inventories			(7,684)						(22,957)						(5,305)									3,576
Prepaid expenses and other current assets			201						(1,030)						(2,066)									3,330
Accounts payable, accrued liabilities and income taxes			(11,574)						12,050						(7,939)									507
Other, net			(3,037)						(1,858)						(612)									(2,378)
Net cash (used in) provided by operating activities			(5,810)						9,482						(9,445)									19,908
Investing activities
Capital expenditures			(8,887)						(12,198)						(4,489)									(3,532)
Acquisitions, net of cash acquired			—						(190,231)						(456,508)									—
Proceeds from sale of fixed assets			468						4,516						—									—
Transfer from trust account			—						—						178,875									—
Net cash used in investing activities			(8,419)						(197,913)						(282,122)									(3,532)
Financing activities
Proceeds from revolving credit facility			54,000						25,000						47,855									3,500
Repayments of revolving credit facility			(3,000)						(47,855)						—									(8,500)
Long-term borrowings			—						375,000						140,000									—
Repayments of long-term borrowings			(3,750)						(139,314)						(3,500)									—
Debt issuance costs			(719)						(11,589)						(7,139)									—
Payment of contingent consideration			(29,108)						—						—									—
Proceeds from sale of common stock and warrants			—						1						75,000									—
Tax withholdings related to net share settlements of stock-based awards			(898)						(1,913)						—									—
Funding to Parent, net			—						—						—									(11,924)
Net cash provided by (used in) financing activities			16,525						199,330						252,216									(16,924)

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Effect of exchange rate changes on cash and cash equivalents			(1,916)						499						714									215
Net change in cash and cash equivalents			380						11,398						(38,637)									(333)
Cash and cash equivalents, beginning of period			28,296						16,898						55,535									10,395
Cash and cash equivalents, end of period			$	28,676					$	28,296					$	16,898								$	10,062
Supplemental disclosure of cash flow information
Interest paid			$	28,386					$	21,203					$	3,328								$	798
Taxes paid, net of refunds			$	9,113					$	4,523					$	3,091								$	2,244
Supplemental disclosure of non-cash investing
Non-cash capital expenditures			$	—					$	3,796					$	—								$	—

Accounts receivable allowance balance at December 31, 2019 (Predecessor)			$	2,833
January 1, 2020 to June 25, 2020 additions charged to revenues, costs and expenses			759
January 1, 2020 to June 25, 2020 deductions and other			(2,148)
Accounts receivable allowance balance at June 25, 2020 (Predecessor)			$	1,444
June 26, 2020 to December 31, 2020 additions charged to revenues, costs and expenses			709
June 26, 2020 to December 31, 2020 deductions and other			(1,198)
Accounts receivable allowance balance at December 31, 2020 (Successor)			$	955
2021 additions charged to revenues, costs and expenses			1,783
2021 deductions and other			(1,453)
Accounts receivable allowance balance at December 31, 2021 (Successor)			$	1,285
2022 additions charged to revenues, costs and expenses			2,711
2022 deductions and other			(2,382)
Accounts receivable allowance balance at December 31, 2022 (Successor)			$	1,614

Inventories—Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predicable costs of completion, disposal, and transportation. The cost of inventory is determined by the first in, first out or average cost methods.

Historically, the Company has encountered limited instances whereby customers rejected products as a result of orders being materially inaccurate and/or products being defective. The Company tracks the reason codes for those customer returns. Based on that, the materiality of such returns is assessed. A return reserve is calculated (based on historical data as described above) every month to record an adjustment to net sales; these adjustments have not been significant.

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Sweeteners and adjacencies			$	422,638					$	389,174					$	96,857								$	80,749
Licorice products			115,634						104,799						50,311									47,579
Total product revenues, net			$	538,272					$	493,973					$	147,168								$	128,328

The following table presents revenues disaggregated by business and geographic region (in thousands):

			(Successor)																					(Predecessor)
			Year Ended December 31, 2022						Year Ended December 31, 2021						From June 26, 2020 to December 31, 2020									From January 1, 2020 to June 25, 2020
Branded CPG:
North America			$	299,871					$	266,661					$	40,273								$	29,926
Europe			67,962						76,392						35,384									31,838
India, Middle East and Africa			17,828						13,363						6,727									3,778
Asia-Pacific			22,371						20,787						8,172									9,328
Latin America			14,606						11,971						6,301									5,879
Flavors & Ingredients			115,634						104,799						50,311									47,579
Total product revenues, net			$	538,272					$	493,973					$	147,168								$	128,328

The following summarizes the purchase consideration (in thousands):

Base cash consideration			$	80,000
Closing adjustment			(968)
Total Purchase Price			$	79,032

Accounts receivable			$	3,223
Inventories			6,824
Prepaid expenses and other current assets			223
Property, plant and equipment, net			143
Operating lease right-of-use assets			76
Intangible assets			36,300
Other assets			3
Total assets acquired			46,792
Accounts payable			3,477
Accrued expenses and other current liabilities			288
Current portion of operating lease liabilities			48
Operating lease liabilities, less current portion			28
Total liabilities assumed			3,841
Net assets acquired			42,951
Goodwill			36,081
Total Purchase Price			$	79,032

The values allocated to identifiable intangible assets and their estimated useful lives are as follows:

Identifiable intangible assets			Fair Value (in thousands)						Useful Life (in years)
Customer relationships			$	3,200					10
Tradenames			33,100						25
			$	36,300

Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and expected future market opportunities. The entire amount of the purchase price allocated to goodwill will be deductible for income tax purposes pursuant to IRC Section 197 over a 15 year period.

Wholesome Acquisition—On December 17, 2020, the Company entered into a stock purchase agreement (the “Wholesome Purchase Agreement”) with WSO Investments, Inc. (“WSO Investments” and together with its subsidiaries “Wholesome” and affiliates). WSO Investments is the direct parent of its wholly-owned subsidiary Wholesome Sweeteners, Incorporated, which was formed to import, market, distribute, and sell organic sugars, unrefined specialty sugars, and related products. Wholesome is included within the Company’s Branded CPG reportable segment. Wholesome’s results are included in the Company’s consolidated statement of operations from the date of acquisition.

The following summarizes the purchase consideration (in thousands):